The company’s recent success hinges on a trifecta of factors:
- aggressive AI investments,
- a robust and expanding clientele, and
- a growing ecosystem of strategic partnerships.
This combination appears to be resonating with both customers and investors, driving optimism about Cognizant’s future.
Cognizant isn’t just dabbling in AI; they’re diving headfirst. The company is integrating Anthropic‘s cutting-edge AI tools, including Claude for Enterprise, Claude Code, Model Context Protocol (“MCP”) and Agent SDK. This move aims to empower clients to seamlessly embed AI into their existing infrastructure, leading to improved performance, risk management, and cost optimization.
This isn’t just about offering AI services; it’s about transforming Cognizant’s own operations. The company reports that roughly 30% of its internal code is now AI-generated, with aspirations to reach 50% in the coming years. This AI-led productivity boost is already streamlining decision-making, improving accuracy, and accelerating cycle times across more than 150 use cases.
Flowsource: The AI Platform Gaining Traction
At the heart of Cognizant’s AI strategy is Flowsource, a platform that integrates generative and agentic AI across the entire software development lifecycle. With over 70 clients already onboard and another 120 in the pipeline, Flowsource is quickly becoming a key differentiator for Cognizant. Pearson, for example, is leveraging Flowsource to modernize its learning platforms, products, and applications.
Cognizant understands that it can’t go it alone in the AI revolution. The company is actively forging strategic partnerships with key players in the tech landscape. Beyond Anthropic, Cognizant has also expanded its partnership with Rubrik (RBRK) to offer Business Resilience-as-a-Service (BRaaS). This collaboration is designed to help clients quickly recover from cyber incidents and ransomware attacks, minimizing disruption to critical business operations.
These partnerships are crucial for expanding Cognizant’s reach and capabilities, allowing the company to offer a more comprehensive suite of AI-powered solutions to its clients.
Cognizant’s bullish stance on AI is reflected in its financial guidance. The company anticipates fourth-quarter 2025 revenues to land between $5.27 billion and $5.33 billion, representing a growth of 3.8-4.8%. This positive outlook is further supported by an expected adjusted operating margin of approximately 15.7% for 2025, a 40-basis-point increase from 2024.
The company’s strong performance has earned it a Zacks Rank #2 (Buy). While not a direct recommendation, it highlights the positive sentiment surrounding the stock. Investors looking for other promising stocks in the industry might also consider Fair Isaac (FICO) and Vertiv (VRT), both currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
“Cognizant’s expanding partner base that includes the likes of Anthropic, Rubrik RBRK, Pearson and others has been a key catalyst.”
Cognizant’s transformation into an AI-first company is a bold move, but one that appears to be paying off. While challenges undoubtedly lie ahead, the company’s strategic investments, expanding partner ecosystem, and positive financial outlook suggest that it is well-positioned to capitalize on the growing demand for AI solutions. Whether Cognizant can maintain its momentum and truly establish itself as an AI leader remains to be seen, but the early signs are certainly encouraging.
